Extract from the Report of the panel on defining the future of trade convened by WTO Director-General Pascal Lamy.
In April 2012, the Director-General of the WTO, Pascal Lamy, invited a diverse group of prominent non-state stakeholders to analyse challenges to global trade opening in the 21 st century. The Panel held a series of closed meetings and also consulted extensively with interested parties.
Chapter 1 of the Panel's report discusses the contribution that trade opening has made to growth, development and prosperity. It also discusses the challenges of managing jobless growth, high unemployment, poverty, inequality, the environment and sustainable development, and the role of trade as well as investment in this context.
Chapter 2 examines certain transformational factors that have shaped trade in recent years and will continue to do so in the future. These include increasing globalization, geographical shifts in patterns of growth, trade and investment, technological advances, the rise of international value chains, the proliferation of preferential trade agreements, and the growing influence of non-tariff measures.
Chapter 3 contains a number of recommendations for possible action. They are not prioritized in terms of their degree of importance by the Panel. They are organized around an exploration of the principles and processes driving trade relations, along with a series of specific issues that have either been raised in other contexts, including the Doha Round, or which the Panel believes warrant consideration. The Panel does not offer specific recommendations to deal with the Doha Round, other than noting that the issues in the Doha agenda will not disappear and that not fulfilling this collective undertaking could put at stake the multilateral trading system itself.
RECOMMENDATIONS
Principles of the multilateral trading system
Non-discrimination: managing preferential trade
While we see the advantages and contribution of preferential trade agreements, we also acknowledge their disadvantages when compared with the multilateral trading system. We recommend that WTO members engage explicitly in an exploration of ways in which preferential trade agreements and the principles underlying them could increasingly converge with the multilateral system, perhaps starting with the elaboration of best practices.
Non-discrimination: managing non-tariff measures
While the WTO is not responsible for managing public policy in key areas of the economy, such as health, safety, environmental quality and the rights of labour, we believe the WTO must find ways of ensuring convergence between the underlying objectives of trade opening and public policies.
Transparency, accountability and stability
Members have an obligation to pursue a transparent approach in their dealings. They should improve their record for observance of their transparency obligations in terms of policies, measures, and data.
Managing reciprocity and flexibility
The Panel recommends a new approach to managing reciprocity and flexibility which fully respects the different realities and needs of members at different levels of development, but embraces a more granulated and dynamic process leading progressively to convergence.
Processes matter
Consensus decision-making
The Panel recommends maintaining consensus decision-making but advocates that members vetoing the adoption of decisions provide reasoned explanations for their position. Consensus must be built gradually through negotiation and mutual accommodation.
Building the agenda
The WTO Secretariat should be permitted to table proposals in order to speed-up the deliberative process and f acilitate consensus by providing technical information and fresh ideas. This would in no way compromise the exclusive right of members to decide.
Notifications
Members should strengthen their commitment to transparency through respecting and improving notification procedures. They should consider extending the authority of the Secretariat further in collecting, verifying and recording official notifications.
The WTO Secretariat
We believe members should support a stronger Secretariat, with sharpened expertise across the WTO's range of activities and stronger research capacity.
Reaching out to stakeholders and the public at large
The WTO should engage more directly with non-governmental stakeholders, including business, trade unions, academics and non-governmental organi zations, as well as the public at large. Platforms should be established for regular exchanges.
Issues directly linked to existing WTO provisions
Trade-distorting subsidies
While subsidies can address market failures, they can also distort trade. Ways must be found of managing tensions between good subsidies and any adverse affects they may have on third parties, as well as avoiding bad subsidies.
Tariff peaks and tariff escalation
Tariff peaks and tariff escalation distort trade and frustrate efforts, particularly by developing countries, to add more value to raw material and agricultural products as part of their efforts to diversify and grow their economies. Tariff peaks and escalation should be eliminated.
Export restrictions
Just as with tariffs, members have their own reasons for using export restrictions and for not wanting them to be used, but we believe negotiations could be usefully engaged on this issue.
Agriculture
For a variety of reasons, there has long been an asymmetry between agriculture and manufactured goods in the degree of progress on trade opening. This has lessened growth and development opportunities for some countries and agriculture opening must be seriously addressed.
Trade facilitation
Effective international action on trade facilitation would generate win-win outcomes for the international trading community. We strongly encourage members to complete the trade facilitation negotiations by the Ninth Ministerial Conference in Bali in December 2013.
The digital economy
Electronic communication has lowered costs, shrunk distance, squeezed time and provided a vast range of opportunities for those who have access to it. Regulation should not stifle this medium and we believe the WTO work programme on electronic commerce should be reinvigorated.
Issues raised as being relevant to the WTO
Competition policy
We believe that members should engage in the quest for a more trade-supportive international competition policy framework, building on the work of other international organizations such as UNCTAD, the OECD and the International Competition Network.
International investment
Like in the area of competition, we see the absence of multilateral rules on investment as a gap in cooperation. Current bilateral arrangements are not, in our view, a satisfactory substitute for a comprehensive international investment agreement.
Currencies and international trade
While monetary and exchange rate matters are the responsibility of the IMF, we recognize the links between trade and exchange rates, and urge continued cooperation between the IMF and the WTO in order to avoid the risk of a clash of regimes.
Trade finance
The absence of trade finance can severely damage trade and we strongly urge the WTO to continue to monitor the situation and work with other stakeholders to minimize the impact of scarce or costly trade finance and to help build capacity in developing countries.
Labour
Globalization has focused attentions on a range of issues relating to the legal rights of labour and working conditions across the world. These issues come under the purview of the ILO but they are a shared international concern. Continuing convergence of labour standards should be a primary international objective.
Climate change and trade
It is the primary responsibility of environment negotiators to define necessary mitigation actions, and a shared responsibility of the trade and environment communities to ensure compatibility between the two regimes.
Corruption and integrity
Although the WTO does not have an explicit mandate to address corruption, we believe the WTO can contribute in a variety of ways to purging this scourge, particularly through its work on various dimensions of transparency and on government procurement.
Aid for Trade
Trade capacity building is essential to allow many poor countries to benefit from trade opening. Aid for Trade should be anchored in the WTO. Over time, Aid for Trade should develop into Investment for Trade through a closer relationship between development assistance and private investment.
Coherence of international economic rules
We see the need for greater coherence among international policy regimes in order to benefit from synergies among policies that often operate in isolation. We recommend the establishment of a forum to explore these issues in depth.
CONCLUSIONS
We believe that governments face a four-pronged convergence challenge:
Convergence among members: this first convergence concerns negotiations among members, as well as their sequencing, in order to achieve progressive, development- friendly convergence of their trade regimes.
Convergence of non-multilateral trade regimes with the multilateral trading system: this second convergence relates to the gradual alignment of different trade regimes, in particular preferential trade agreements and the multilateral trading system.
Convergence between trade and domestic policies: this third convergence requires deeper coherence between trade and other domestic policies, such as education, skills and innovation.
Convergence between trade and public policy non-tariff measures: this fourth convergence requires greater coherence between trade rules and policies, norms and standards in other areas of international cooperation.